Healthcare insurance in New Zealand: 82% of HC in New Zealand is publicly funded

In 2015, the nominal GDP in New Zealand was €155.2 bn, equivalent to €33,383 per capita. Its per capita GDP is comparable to the United Arab Emirates, the UK or Andorra. Its population is around 4.5 m, comparable to Finland. GDP’s annual growth rate was 3.4% in 2015, which represents a small peak amongst the rates of previous and forecasted years. 2013 the rate was around 1.7% and come 2016 and 2017, the rate is forecasted to decline again to around 2.2% on average.

Macroeconomic and healthcare (HC) expenditure snapshot

New Zealand’s healthcare expenditure in 2015 as a percentage of GDP is 10.9%. This is average for central and northern European nations (which are more appropriate for comparison than regional markets). E.g. Finland spends 9.8% and neighbouring Australia spends 11.3%.

In terms of GDP per capita, New Zealand spends €3,718.58 per capita, compared to €3,704.31 in Finland or €4,393.01 in Australia.

82.1% of healthcare is funded publicly, and 17.9% is privately financed.

Public insurance coverage

The public health system in New Zealand is subsidized by the government for public and private healthcare and offers a range of insurance schemes to cover various healthcare needs.

A patient referred to a hospital and or to specialized care by their (public) GP or primary care provider is covered by the state health insurance. A patient seeking private or specialized care without a referral is most likely charged with higher out-of-pocket contributions, though in some cases the ACC (Accidents Compensation Commission) or another public insurer will help cover such private costs. For example, when a District Health Board (the regional HC authority) is in need of additional capacity, they may contract the services of a private facility and state funds will finance the procedure.

All citizens, residents and work visa holders valid for two years or more are entitled to publically funded health care for primary, secondary, tertiary and dental care.

New Zealand, Australia and the UK have a reciprocity health agreement, under which each country’s citizens whilst visiting one of the other countries are entitled to certain publically funded healthcare services to the same extent that a national of that country would be.

Most medical costs resulting from an accident are covered by the Accident and Compensation Scheme.

Immunization is free for all children, regardless of eligibility for publically funded healthcare.

Accident and Compensation Scheme

The Accident and Compensation Scheme is managed and covered by New Zealand’s unique ACC, which covers the majority of medical costs incurred due to accidents and injuries.

ACC operates according to a no-fault coverage, where all accidents ranging from car crashes to work or home injuries, regardless of who caused the injury, benefit from publically funded care. In this scheme, users do not have the right to sue anyone for the causation of an accident injury.

The scheme helps fund medical care and rehabilitation costs, including physiotherapy and residential services. It also provides funds to New Zealand families who suffered from an accidental death, living in or outside of New Zealand.

It covers work-related injuries, medical treatment-induced ailments, sexual abuse, and mental traumas from work or abuse.

Cost subsidies for severe illness and or vulnerable groups

Community Services Card – Low income earners and other particular socioeconomic groups (e.g. refugees) are eligible for a Community Services Card (CSC), which reduces the upfront fee when consulting a doctor.

  • A CSC card reduces the cost of the following:
    • Prescription fees
    • Normal hour and after-hour medical consultations
    • Visiting a doctor where the patient is not enrolled with
    • Emergency dental care at hospitals and funded dental care providers
    • Public hospital care outside of the patient’s corresponding area when they have been referred there
    • Domestic care services

High Use Health Card – Those that do not qualify for a CSC could be entitled to a Prescription Subsidy Card, for pharmaceutical needs, or a High Use Health Card. A High Use Health card provides similar subsidies as a CSC card, but is only valid for one year (with possibility of renewal) and solely for individuals who require frequent medical attention.

  • Only a medical practitioner is able to apply for such a card for their patient. Such a patient must have received at least 12 health practitioner consultations within the previous calendar year.

Care Plus – A patient registered with a Primary Health Organization suffering from a long-term, chronic or terminal health condition may be eligible for Care Plus public insurance. Care Plus covers additional services such as discounts for visiting a GP after-hours or consulting a GP where the patient is not enrolled with.

  • Care Plus is designed as a whole-round care plan, where the patient is initially assessed fully and their health needs are explored in more depth, followed by setting clear and realistic health objectives.
  • The scheme does not only reduce the user fees for the patient, but it also provides additional funding to the GPs themselves to facilitate more intensive attention for the patient.

Private insurance

Those who wish to avoid waiting lists; desire the option of having a wider doctor, specialist or surgeon selection; or those who require additional financial support for a certain health treatment, can take out private insurance to help them finance their healthcare.

There are 2 principle forms of private policies offered in New Zealand:

  • A comprehensive cover, covering all primary care visits and prescriptions
  • Specific or specialist care policies, covering elective surgery and tertiary care

Approximately 31% of New Zealanders purchase complementary health insurance coverage to help with cost-sharing, specialist fees, elective surgery in private hospitals, and or supplementary coverage to receive faster access to elective treatments.

For further quantitative and qualitative information on the New Zealand healthcare system and the macroeconomic climate, please look into our Business intelligence platform or order the New Zealand Healthcare Scan incl. Surgical Procedures Volumes (all specialisms) – product license containing volumes of 984 surgical procedures in 13 specialisms.
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